English Practice Set for RBI Grade B 2018

Published on Thursday, April 26, 2018

By Unknown

Read the following passage carefully and answer the following questions given below: Sixteen years in the making, India is finally set to roll out the Goods and Services Tax (GST) from July 1. Prime Minister Narendra Modi will inaugurate the new indirect tax at the stroke of midnight in Parliament, taking a leaf out of Jawaharlal Nehru’s book. “A moment comes, which comes but rarely in history, when we step out from the old to new,” Nehru had said while ringing in India’s independence. The two events are obviously not comparable — nonetheless, the GST’s introduction could have been a rare transition, but is not. The GST, to be collected on everything from matchboxes to gold, will touch everyone. A modern tax system should be fair, uncomplicated, transparent and easy to administer. It must yield revenues sufficient to cover the cost of government services and public goods. India’s GST does not pass these tests convincingly. It is too complex. We must collect it at fewer and lower rates, and on more items. The GST has been fixed for more than 1,200 categories of goods and services consumed in the country at 0.25%, 3%, 5%, 12%, 18% and 28%, along with cesses to be imposed additionally in some cases. The present taxation system has not been given the boot yet. Electricity, real estate and alcohol will remain in it, exempt from the GST. Petroleum products will be in both systems, old and new, but with zero-rate GST. Over half the items will be taxed at 18% or 28% GST, the steepest rates in the multi-rate structure. This skew violates the basic principle of revenue collection: the lower the taxation rate, the higher the compliance. An opportunity is lost to collect more tax revenues, while at the same time, taking a little load off the consumer’s pocket. More than sound economic, or political, logic, the GST seems driven by the deciding authorities’ discretion. The GST rate for gold, a luxury good, is lower than that for matchboxes. The tax incidence is the same in the GST on environment-friendly hybrid vehicles and fossil fuel-guzzling SUVs. In the extant system, the effective rate for guzzlers is significantly higher than that for hybrids. This ‘carbon tax’ on SUVs, popular with politicians, is being withdrawn. The GST will be imposed at 18% on soaps and washing soaps, but at 28% on detergents. Some moviegoers will pay 18% GST and, others, on the same movie, 28%, depending on the price of cinema ticket — not exactly the promised ‘One nation, one tax’. The GST, as it’s being rolled out, is an outcome of a political process in which 29 States and seven Union Territories agreed to give up their right to impose sales tax on goods (VAT) and the Centre gave up its right to impose excise and services taxes. In the amended federal arrangement, they will each receive a share of the GST collected nationally. Instead of every State imposing a tax, they will sit together and decide what that tax rate should be. Individually, States see this as an erosion of their financial autonomy, even if Union Finance Minister Arun Jaitley, the chief architect of the consensus, described it as, “the states and Centre pooling their powers and sovereignty”. The constitutional guarantee that the Centre will fully “reimburse” the transitional losses did not fully address the States’ insecurities. The States insisted on keeping the GST’s rate structure as close as possible to the old system. A GST regime resembling the old tax system cannot be a low, single-rate GST. The options narrowing to a delayed or an imperfect GST, the Centre chose to defer to the States’ collective opinion. The result: far from simple or neat, the new indirect tax is a multitude of rates, cesses and exemptions. So, politicians, not tax experts, devised the GST. The GST Council made up of Ministers from State and Central governments, scrambled elements from the current indirect taxation system into the GST, tinging the new with the old, guided by old habits, not a healthy appetite for reform. “Status quo has strong appeal in real life,” Prime Minister Manmohan Singh had said of the resistance to 1991’s economic reforms. Chief Economic Advisor Arvind Subramanian’s summation of the process that delivered the GST suggests that decades later, attitudes have not changed: “On the GST, the political pressures from the States to keep rates low and simple were minimal. The general desire is for the structure to mimic the complicated status quo. There was an insufficient concern for the implied consequences for efficiency and simplification.” The lingering imperfections and disregard for economic principles will limit the GST’s transformational potential. Small firms, unlike industry chambers and lobbies, are not vocal, and therefore not easily heard. They are concerned about the number of man hours the new reporting requirements will extort. These should be taken on board. The GST Council must show sensitivity to transitional challenges. A hotline among its members, as an instantaneous problem-solving mechanism, may smoothen the transition. Increasing simplicity and reducing the complexities remains a promise made, not kept.

Question 1.

Which of the following sentence is incorrect about the modern tax system according to the passage? A)The tax system should be transparent and easy to use. B) It should be complicated enough to understand to make it reliable and the norms should be different for some goods. C) It must lead to make less revenue for the government to fulfil their expenses to control black money and corruption I- Only A II- Only B III- Both A and B IV- Both B and C V- All are correct Solution: IV According to the second paragraph “A modern tax system should be fair, uncomplicated, transparent and easy to administer. It must yield revenues sufficient to cover the cost of government services and public goods.”, this makes option B and C incorrect. So option IV is the correct choice.

Question 2.

Which of the following statements about GST are true according to the given passage? A)Electricity, real estate, and alcohol will remain in it, but not free from the GST. B) This skew violates the basic principle of revenue collection. C) The GST rate for gold, a luxury good, is higher than that for matchboxes. D) The rate for hybrids are relatively lower than the guzzlers I- A and B II- B and D III- A and C IV- All are correct V- None is correct Solution: III In paragraph 3rd it is given that they are exempt from GST which makes sentence A wrong. In paragraph 4th it is written that the rate for gold and luxury items are lower than matchboxes which makes it logically incorrect whereas sentences B and D are correct as given in paragraph 3rd and 4th.

Question 3.

What will be the best suitable title for the passage given above? I- A goods and services tangle II- GST: one nation one tax III- Midnight makeover: adoption of GST IV- GST, an old new tax V- None of the above Solution: IV as the passage is talking about both the old and new tax system and it also speaks about the transformation in reforming new tax system from the old one so this title is the correct choice.

Question 4.

Which word cannot be same in the meaning as the word “reimburse” according to the passage? I- Remunerate II- Welsh III- Payback IV- Render V- Repay Solution: II as all words except welsh means to pay something as welsh means fail to provide something which can be its antonym but doesn’t have the same meaning. So welsh is the correct choice.

Question 5.

According to the passage which of the following pairs of tax slab of the goods is wrong I- Soap- 18% II- Detergent-28% III- Cinema - 18% IV- All correct V- None correct Solution: III as the tax slab for tickets are not mentioned clearly it can be 18% or 28% as given in paragraph 5th.

Question 6.

Below a pair of sentences is provided in which some words are compressed. You need to find out suitable pair of words from the options, which can fulfil the blank in both the sentences contextually and coherently A) The fortunes of the super-rich, like Bill Gates and Jack Ma, are growing globally, and they can grow or ____________ by billions in a matter of hours. American writer F Scott Fitzgerald, that great chronicler of society's ____________, was once asked whether the rich were different from the rest of us. B) Greitens' job approval ratings have _________ since his personal __________ were exposed. I- Tumble, foibles II- Plunge, brawn III- Propel, blemish IV- All are correct V- None is correct Solution: I using the options in B the ratings cannot be propelled because of personal blemishes (means flaws). It doesn’t make any sense. Brawn is irrelevant which means physical strength or muscles. First is appropriate as tumble means fall quickly and foible is a minor weakness. So the ratings have fallen (tumble) because his personal weakness (foibles) was exposed. Both are also suitable in the first part as super-rich can grow or tumble by billions. Great chronicler of society's foibles is also correct. Hence option I is the correct choice.

Question 7.

Below a pair of sentences is provided in which some words are compressed. You need to find out suitable pair of words from the options, which can fulfil the blank in both the sentences contextually and coherently A)Few Americans will recall the 1983 ____________ of a small Caribbean nation thousands of miles from North Korea. But in fact, this __________ set the stage for the nuclear standoff today. B) Soviet __________ of Afghanistan, invasion of Afghanistan in late December 1979 by troops from the Soviet Union. The Soviet Union intervened in support of the Afghan communist government in its ___________ with anticommunist Muslim guerrillas during the Afghan War (1978–92) and remained in Afghanistan until mid-February 1989. I- Deluge, feud II- Invasion, conflict III- Infringement, fight IV- II or III both can be used V- All of these Solution: II if we see only the options of second blank in which feud means prolonged and bitter quarrel or dispute but it doesn’t means a war fight means a violent confrontation but it does not fulfil the need of the sentence as there was a war so the right option is conflict. This eliminates I III IV and V option so option II is the right choice.

Question 8.

Below a pair of sentences is provided in which a word is compressed. You need to find out suitable word from the options, which can fulfil the blank in both the sentences contextually and coherently A)Hold-ups along the Hiritano and Magi highways, unlawful behaviour from alcohol abuse and rise in criminal activities are the main issues ___________ through the Christmas period in the Central Province. B) In the euphoria stage, people bought because others were buying and because they ____________ being able to sell quickly at a higher price. I- Dereliction II- Antedate III- Reinforced IV- Feigned V- Anticipated Solution: V as both the sentence s are in simple past form so second form of the verb will be used which eliminates I and II easily. Reinforced means strengthen or support something feigned means pretend something and anticipated means expect or predict something. So only the V option is relevant as people bought the things because others were buying and they predicted (anticipated) that they will be able to sell it quickly at higher prices.

Important Lists

About me

My name is Ramandeep Singh. I authored the Quantitative Aptitude Made Easy book. I have been providing online courses and free study material for RBI Grade B, NABARD Grade A, SEBI Grade A and Specialist Officer exams since 2013.